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COMMENTARY TO SUMMARISED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

General

The board of R&E is pleased to announce the interim results for the six months ended 30 June 2014. The period saw the conclusion of a further successful claim against third parties, resulting in settlement income of R150 million.

Income

The majority of the income recognised in the period under review derived from the settlement of a legal claim against the company’s former auditors.

Financial position

R&E is liquid with no interest-bearing debt. R&E’s total assets consist primarily of cash and cash equivalents. R&E had a net asset value of R179 million or R2.50 per share as at 30 June 2014 (net of the dividend declared, which amounted to R161 million or R2.25 per share).

Cash flow

R&E started the period under review with a cash and cash equivalent balance of R201 million.

Operating activities generated cash of R152 million, primarily as a result of the settlement of a legal claim of R150 million, recoveries of R8.9 million and interest received of R7.3 million, offsetting operating expenses of R14.2 million. Operating expenses include legal and forensic costs of R8.2 million. As at 30 June 2014, R&E held R353 million in cash and cash
equivalents. After paying the dividend of R161 million on 28 July 2014, the company’s cash position was R191 million.

Outlook

The company will continue to take a commercial and pragmatic approach towards legal claims against third parties and their relative legal costs, focus on containing the operational costs where possible and to maintain liquidity.

Johannesburg
18 August 2014

SUMMARISED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

SUMMARISED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

SUMMARISED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

SUMMARISED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

NOTES TO THE SUMMARISED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2014

1. Reporting entity

R&E is a company domiciled and incorporated in the Republic of South Africa. The summarised consolidated interim financial statements of the company for the six months ended 30 June 2014 include the company and its subsidiaries (together referred to as the “group”).

2. Statement of compliance

The summarised consolidated interim financial statements are prepared and presented in accordance with International Financial Reporting Standards, which include International Accounting Standard (IAS) 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the requirements of the Companies Act of South Africa (Act 71 of 2008) and the Listings Requirements of the JSE Limited. These summarised consolidated interim financial statements were approved by the board of directors on 12 August 2014.

Mr Van Zyl Botha CA(SA), the financial director of R&E, is responsible for these interim financial statements and has supervised the preparation thereof.

3. Significant accounting policies

The accounting policies applied by the group in these summarised consolidated interim financial statements are the same as those applied by the group in its consolidated financial statements for the year ended 31 December 2013.

4. No independent review by the auditor

The company’s auditor has not reviewed or audited the summarised consolidated interim financial statements of R&E for the six months ended 30 June 2014.

5. Segment reporting

The Group operates in a single operating segment as an investment holding company with assets in the mining industry.

6. Recoveries

R&E concluded a settlement agreement with PriceWaterHouseCoopers (“PwC”) on 16 April 2014 in terms of which R150 million was payable by PwC to R&E. The settlement relates to the group’s claims against PwC for damages arising from PwC’s audit of the group during the period 1999 to 2003. Shareholders are referred to the
announcement made by the company on 16 April 2014 relating to this settlement. R&E recognised the payment of R150 million received in cash during June 2014.

7. Earnings per share

8. Net asset and tangible net asset value per share

The number of shares outstanding at 30 June 2014 and 30 June 2013 has been adjusted for the 2,999,893 treasury shares held.

9. Material changes

The final settlement received from PwC is material in its totality.

10. Related party transactions

There were no related party transactions during the period under review other than in the normal course of business, i.e. key management remuneration.

11. Events after reporting date

There were no significant events between the reporting date and the approval date of these results.

Directors: DC Kovarsky (Chairman)**, M Steyn (CEO)*, V Botha*, P Burton**, JH Scholes** (*Executive, **Independent non-executive) Company secretary and financial director: V Botha CA(SA)

Transfer secretaries: Computershare Investor Services (Pty) Ltd (Registration number 2004/003647/07), 70 Marshall Street, Johannesburg, 2001 Sponsor: PSG Capital, 1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600

Summarised Group Unaudited Interim Financial Highlights for the six months ended 30 June 2015 Randgold & Exploration
Commentary to sumarised Group Interim Financial Statements

Income

The majority of income recognised in the period under review was derived from a further recovery from the Insolvent Deceased Estate of RB Kebble.

Financial position

R&E is liquid with no interest-bearing debt. R&E’s total assets consist primarily of cash and cash equivalents and mineral prospecting rights. R&E’s net asset value of R2.27 per share at 30 June 2015 remained unchanged from 31 December 2014.

Cash flow

R&E started the year under review with a cash and cash equivalent balance of R173.9 million. Operating activities utilised net cash of R5.1 million, primarily as a result of recoveries of R4.4 million offsetting net cash utilised in operations of R9.5 million.

Investment activities utilised cash outflows of R2.8 million, primarily from the net acquisition of investments in equity securities of R2.9 million. R&E remains in a healthy cash position with R171.8 million in cash and cash equivalents at 30 June 2015.

Outlook

The outlook for the balance of the year is largely dependent on the progress and outcome of legal proceedings in which the company is engaged. Legal expenses for the balance of the year are expected to be at a similar level. Management will continue to approach all legal matters and related expenses in a commercially pragmatic manner.

David Kovarsky 
Chairman Chief

Marais Steyn
Executive Officer
Johannesburg
14 August 2015

The summarised group unaudited interim financial highlights for the six months ended 30 June 2015 are as follows:

Notice to shareholders

This announcement contains only a summary of the information contained in the full announcement made on SENS on Friday, 14 August 2015 (Full Announcement). Please refer to the Full Announcement for additional information. The Full Announcement is available for viewing on R&E’s website at www.randgoldexp.co.za or may be requested and obtained in person, at no charge, at the registered offi ce of the company or the company’s sponsor during offi ce hours. Any investment decisions by investors and/ or shareholders should be based on consideration of the Full Announcement made on SENS. This short-form announcement is the responsibility of the R&E board of directors

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In terms of the Listings Requirements of the JSE Limited, companies are required to publish a trading statement as soon as they become reasonably certain that the financial results for the period to be reported on next will differ by more than 20% from those of the previous corresponding period.

Shareholders are hereby advised that a reasonable degree of certainty exists that the earnings per share for the six months ended 30 June 2014 is expected to be between 212 and 215 cents per share (2013: 23 cents per share). Headline earnings per share are expected to be between 212 and 215 cents per share (2013: 22 cents per share).

The information contained in this trading statement has not been reviewed or reported on by the Company’s external auditors. R&E expects to release its financial results for the six months ended 30 June 2014 on or about 15 August 2014.

Johannesburg
12 August 2014
Sponsor
PSG Capital

Shareholders are referred to the announcement published on SENS by the Company on 16 April 2014, relating to the settlement agreement concluded between the Company and PricewaterhouseCoopers Incorporated (“the Settlement”) and the voluntary circular dated 30 April 2014 setting out the full particulars of the Settlement and convening a general meeting of
shareholders (“the General Meeting”).

Shareholders are further referred to the announcement published on SENS by the Company on 30 May 2014, whereby shareholders were advised that the requisite majority of shareholders approved all resolutions relating to the Settlement at the General Meeting.

On 26 June 2014, the Company received payment of R150 million from PricewaterhouseCoopers.

After consideration of the cash position of the Company, as a result of the Settlement, the directors have approved and declared a gross special cash dividend of 225 cents from income reserves, equating to approximately R161 million in aggregate.

No secondary tax on companies credits are available to be utilised by the Company for the special dividend. The final dividend amount, net of South African dividend tax of 15% which equates to 33.75 cents per share, is therefore 191.25 cents per share for those shareholders that are not exempt from dividend tax.

The number of ordinary shares in issue at the declaration date is 74 585 065, and the income tax number of the company is 9042/001/60/3.

The salient dates of this special dividend distribution are:
Last day to trade cum dividend Friday, 18 July 2014
Trading ex dividend commences Monday, 21 July 2014
Record date Friday, 25 July 2014
Date of payment Monday, 28 July 2014

Share certificates may not be dematerialised or rematerialised between
Monday, 18 July 2014, and Friday, 25 July 2014, both days inclusive.

Johannesburg
26 June 2014
Sponsor: PSG Capital (Pty) Limited

Shareholders are referred to the announcement published on SENS by the Company dated, 16 April 2014, relating to the settlement agreement concluded between the Company and PricewaterhouseCoopers Incorporated (“the Settlement”).

Pursuant to the publication of the aforementioned announcement, shareholders are hereby advised that the voluntary circular setting out the full details of the Settlement, incorporating a notice convening a general meeting, will be distributed to shareholders today, 30 April 2014

Accordingly, notice is hereby given that a general meeting of the Company’s shareholders will be held at 12:00 on Friday, 30 May 2014, at MW Business Centre, Michelangelo Hotel, Mandela Square, Sandton, Johannesburg (“the General Meeting”), to consider and, if deemed fit, to approve, with or without modification, the resolutions contained in the notice of General Meeting.

The date on which shareholders must be recorded in the share register of the Company for purposes of being entitled to attend and vote at the General Meeting is Friday, 23 May 2014, with the last day to trade being Friday, 16 May 2014.

The voluntary circular incorporating the notice of General Meeting is also available on the Company’s website and can be viewed at www.randgoldexp.co.za/news.html.

Johannesburg
30 April 2014
Sponsor:
PSG Capital

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to the action you should take, please consult your Central Securities Depository Participant (“CSDP”), broker,
banker, attorney, accountant or other professional advisor immediately.
Action required by Dematerialised and Certificated Shareholders:

1. If you have disposed of your Shares in Randgold & Exploration Company Limited (“R&E”), this Circular and the attached Form of
   Proxy should be handed to the purchaser of such Shares or the CSDP, broker, banker or other agent through whom the disposal
   was effected.

   If you are holding Certificated Shares and/or are an “Own-Name” Dematerialised Shareholder:

2. Holders of Certificated Shares and holders of Dematerialised Shares who have elected “Own-Name” registration in the subregister
   through a CSDP, who are unable to attend the General Meeting of R&E’s Shareholders to be held at MW Business
   Centre, Michelangelo Hotel, Mandela Square, Sandton, Johannesburg at 12:00 on Friday, 30 May 2014 (“the General Meeting”),
   but wish to be represented thereat must complete and return the attached Form of Proxy in accordance with the instructions
   contained therein so as to be received by the Transfer Secretaries, Computershare Investor Services (Proprietary) Limited,
   70 Marshall Street, Johannesburg, 2001 (PO Box 61763, Marshalltown, 2107) by no later than 12:00 on Wednesday, 28 May 2014.
   If you have Dematerialised your Shares and are not an “Own-Name” Dematerialised Shareholder:
3. Holders of Dematerialised Shares must instruct their CSDP or broker to vote on their behalf in accordance with the custody
   agreement entered into between the Dematerialised Shareholder and their CSDP or broker. Such Dematerialised Shareholders
   who wish to attend the General Meeting in person or send a proxy to represent them thereat, must request their CSDP or broker
   to provide them with the necessary letter of authority for them or their proxy to attend and vote their Shares.
4. Any CSDP or broker which does not obtain timeous voting instructions in terms of paragraph 3 above will be obliged to vote in
   accordance with the instructions

Shareholders are hereby advised that R&E and its former auditor, PricewaterhouseCoopers Incorporated (“PWC”) have concluded a settlement agreement dated 16 April 2014 (“the Settlement Agreement”), in respect of the legal dispute between R&E and PWC arising from PWC’s appointment as R&E’s auditor during the financial period 2000 to 2003 and PWC’s alleged failure to audit R&E properly resulting in losses claimed by R&E which are disputed by PWC (“the Settlement”).

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1. INTRODUCTION

Shareholders are hereby advised that R&E and its former auditor, PricewaterhouseCoopers Incorporated (“PWC”) have concluded a settlement agreement dated 16 April 2014 (“the Settlement Agreement”), in respect of the legal dispute between R&E and PWC arising from PWC’s appointment as R&E’s auditor during the financial period 2000 to 2003 and PWC’s alleged failure to audit R&E properly resulting in losses claimed by R&E which are disputed by PWC (“the Settlement”).

2. DETAILS OF THE SETTLEMENT

2.1. Background information

2.1.1.    On 3 August 2008, R&E instituted a civil action against PWC in the High Court of South Africa (“the Action”), which Action arose as a consequence of PWC’s engagement as R&E’s auditor in respect of the financial period 2000 to 2003.

2.1.2.    Arising from PWC’s alleged failure to properly perform its audit, R&E has, by way of its amended particulars of claim in the Action, claimed damages from PWC as set out therein, contending that in consequence of such alleged audit failures it suffered the damages claimed by it, being the replacement cost of various shares allegedly misappropriated from it and further losses sustained by it in consequence of the misappropriations (“the R&E Claims”).

2.1.3.    For the purposes of the Settlement Agreement, “the R&E Claims” means all and any claims enjoyed by R&E against PWC which arose on or before the signature date of the Settlement Agreement, including any claims which R&E becomes aware of subsequent to the signature date of the Settlement Agreement, in respect of transactions, dealings, conduct and/or acts or omissions which occurred prior to the signature date of the Settlement Agreement, in respect of which R&E enjoys a claim against PWC, whether or not a claim has been instituted against PWC, and incorporating the claims made by R&E against PWC including the capital of, interest incurred on and legal costs in respect of such claims.

2.1.4.    PWC has defended the Action, denying any wrongdoing on its part and that it is liable to R&E in the amount claimed, or at all. PWC has raised a number of defences to the R&E Claims, as set out in its amended plea. For the purposes of the Settlement Agreement, “the PWC Claims” (which are to be settled) means all and any claims enjoyed by PWC against R&E which arose on or before the signature date of the Settlement Agreement, including any claim which PWC becomes aware of subsequent to the signature date of the Settlement Agreement, in respect of transactions, dealings, conduct and/or acts or omissions which occurred prior to the signature date of the Settlement Agreement, in respect of which PWC enjoys a claim against R&E, whether or not a claim has been instituted and includes the capital of, interest incurred on, and legal costs in respect of such claims.

2.1.5.    As at the date of this announcement, the pleadings have closed and the disputes have been referred by R&E and PWC to arbitration (“the Arbitration”), pursuant to the conclusion of an arbitration agreement on 26 July 2013.

2.1.6.    Without any admission of liability or the making of any concessions on the part of either R&E or PWC and purely with a view to avoiding costly litigation and for commercial reasons, R&E and PWC have decided to settle the R&E Claims and the PWC Claims on the basis as provided for in the Settlement Agreement, in terms of which PWC shall make payment to R&E of R150 000 000.00 (one hundred and fifty million rand) (“the Settlement Amount”).

2.2. Conditions precedent

The implementation of the Settlement Agreement is subject to the conditions precedent that:

2.2.1.    R&E procures written irrevocable undertakings from shareholders holding at least 51% (fifty one percent) of the issued ordinary share capital of R&E, within 7 (seven) business days of the signature date of the Settlement Agreement, to vote in favour of the R&E Resolution; and

2.2.2.    R&E shareholders approve and ratify the conclusion and implementation of the Settlement Agreement within 40 (forty) business days of the signature date of the Settlement Agreement, by way of an ordinary resolution requiring 51% (fifty one percent) of R&E shareholders voting in favour of such resolution (“the R&E Resolution”).

2.3. Payment of the Settlement Amount

2.3.1.    PWC shall make payment of the Settlement Amount to R&E within 30 (thirty) days of the closing date of the Settlement Agreement, being the date of fulfilment of the conditions set out in paragraph 2.2 above (“the Closing Date”).

2.3.2.    To the extent that it is determined by the South African Revenue Service that value added tax (“VAT”) is payable on the Settlement Amount, or any portion thereof, PWC shall, over and above the Settlement Amount, pay such VAT as is due to R&E, on presentation of a VAT invoice by R&E to PWC.

2.3.3.    Prior to PWC making payment of the Settlement Amount to R&E, in the event of any person obtaining an order of court in South Africa (including an interim order), prohibiting R&E from adopting the R&E Resolution and/or either or both of R&E and PWC from implementing the Settlement Agreement and such prohibition does not cease to operate within 12 (twelve) months of the Closing Date, either party shall be entitled to resile from the Settlement Agreement, upon giving 5 (five) days written notice to the other party of its intention to do so, in which event the Settlement Agreement shall be of no force or effect and the parties shall be restored to the positions they occupied prior to entering into the Settlement Agreement.

2.4. Effect of the Settlement

2.4.1.    Against payment of the Settlement Amount by PWC to R&E (including any VAT that may be payable thereon):

2.4.1.1.    R&E shall have no further claims against PWC in respect of the R&E Claims, which shall be fully and finally settled;

2.4.1.2.    PWC shall have no further claims against R&E in respect of the PWC Claims, which shall be fully and finally settled;

2.4.1.3.    the R&E Group shall have no claims against PWC, which shall be fully and finally settled; and

2.4.1.4.    the Action and Arbitration shall be at an end.

2.4.2.    For the avoidance of any doubt, the Settlement as contained in the Settlement Agreement is specific to R&E and PWC only, and shall not affect any claims enjoyed by R&E against any third party, which R&E has instituted a claim for, prior to the signature date of the Settlement Agreement.

3. R&E BOARD RATIONALE FOR THE SETTLEMENT

The R&E board (“the Board”) is of the view that the claim against PWC is robust and good progress has been made in preparing for the Arbitration. The Company issued sixteen claims against PWC, amounting to billions of Rands.

The PWC matter is however complex and it is estimated that the arbitration could endure for a lengthy period of time.  Extensive and technical evidence will need to be led in establishing PWC’s alleged audit breaches and the resultant losses to R&E. Litigation is by its very nature uncertain and the Board cannot therefore guarantee a successful outcome in the matter.

Furthermore, the pursuit of the Arbitration requires the commitment of major resources and large legal and forensic expenses. The total legal and forensic expenditure for R&E’s matters for the 2013 financial year amounted to more than 10% of the Group’s NAV. The total legal costs incurred to date relating to the PWC matter amounts to R34 million.

The likelihood of a substantial arbitration award should therefore be weighed against the time it will take to attain an award, the possibility of appeals and the legal and related costs to sustain the process.

The PWC offer of R 150 million (R2.10/share) represents 80% of the Group’s NAV and 99% of its weighted average share price (as quoted on the JSE), which makes the offer significant.

The Board has consistently approached the Company’s recovery process on a commercial basis and has concluded that the Settlement offer of R150 million by PWC is economically attractive and should be proposed to shareholders.

4. PRO FORMA FINANCIAL INFORMATION

The pro forma financial effects set out below have been prepared to assist R&E Shareholders in assessing the impact of the Settlement Amount on the earnings per Share (“EPS”), headline earnings per Share (“HEPS”), net asset value (“NAV”) and tangible net asset value (“TNAV”) per Share. Due to the nature of these pro forma financial effects, they are presented for illustrative purposes only and may not fairly present R&E’s financial position or the results of its operations post the receipt of the Settlement Amount.

The pro forma financial effects have been prepared in terms of the Listings Requirements of the JSE and the Guide on Pro Forma Financial Information issued by the South African Institute of Chartered Accountants. These pro forma financial effects are the responsibility of the Board. The material assumptions are set out in the notes following the table.

Notes and assumptions:

1. The “Audited results prior to the receipt of the Settlement Amount” have been extracted from the audited financial results of R&E for the year ended 31 December 2013.
2. For the purposes of calculating EPS and HEPS it was assumed that the Settlement Amount was received on 1 January 2013.
3. For the purposes of NAV per share and TNAV per share it was assumed that the Settlement Amount was received on 31 December 2013.
4. The proceeds received from the Settlement, being R150 million, are assumed to be invested in a short term call account for the 12 month period earning interest at 5% per annum, being the interest rate current achieved by the Company on cash reserves.
5. Transaction costs of R245 000 relating to the Settlement have been assumed.
6. All adjustments have a continuing effect on the financial results of the Company.

5. DISTRIBUTION OF VOLUNTARY CIRCULAR AND GENERAL MEETING OF R&E SHAREHOLDERS

Shareholders are hereby advised that a voluntary circular setting out the full details of the Settlement, incorporating a notice convening a general meeting, will be distributed to R&E shareholders in due course.

Shareholders are hereby advised that the notice of the general meeting and the relevant details relating to the general meeting will be provided on SENS in due course.

6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

Shareholders are referred to the cautionary announcement dated 7 April 2014 and are advised that as the details of the Settlement have now been announced, caution is no longer required to be exercised by shareholders when dealing in their securities.

Johannesburg
16 April 2014

Sponsor:
PSG Capital