Another production record takes Randgold past 1Moz per annum mark
Monday, February 9, 2015
Cape Town, 9 February 2015 - Randgold Resources increased group gold production by 26% in 2014 while reducing total cash costs by 2%, and ended the year with no borrowings and more than $100 million in cash, cash equivalents and gold on hand.
Results for the year to December, published today, show profit down 17% at $271.2 million, mainly as a result of the drop in the gold price, but the board nevertheless proposed a 20% increase in the final cash dividend to 60 US cents per share, subject to shareholder approval, reflecting the strong cash flow from the group. Group production totalled 1 147 414 ounces (2013: 910 374oz) and the total cash cost per ounce was $698 (2013: $715).
The company’s operations all performed robustly, with its flagship Loulo-Gounkoto complex in Mali increasing production in line with guidance by 10% to 639 219 ounces and reducing total cash cost per ounce by 4% to $672. In its first full year of operation, Kibali in the Democratic Republic of Congo continued to ramp up production, delivering 526 627 ounces at a total cash cost of $573/oz. Tongon in Côte d’Ivoire was still in the final stages of a crusher and flotation circuit upgrade programme at year end but its production of 227 103 ounces at a total cash cost of $872/oz was within 3% of its revised guidance.
Chief executive Mark Bristow said Randgold’s early recognition of a fundamental change in the gold market had enabled it to take prompt and effective action to align its business with a lower gold price. While the gold mining industry as a whole was struggling to maintain its medium term viability in the face of multiple challenges, Randgold was in good shape to manage these and to sustain the profitability of its operations at a $1 000/oz gold price level.
“Our long standing goal of reaching an annual production of 1.2Moz in 2015 is now comfortably within reach, and we are already looking beyond that to our next big step forward. We remain strongly committed to exploration and our geologists continue to scour the gold fields of West and Central Africa for multi-million ounce deposits. The current stress in the gold mining industry is also generating what may well prove to be transformational growth opportunities and we are closely monitoring this situation,” he said.
Randgold also reported today that the feasibility study on the development of an underground mine below the Gounkoto open pit had identified a 4.7 million tonne at 6g/t reserve yielding 900 000 ounces. The project cleared the company’s hurdle rate of a 20% internal rate of return at a long term gold price of $1 000/oz. Development of the mine, which will be Randgold’s fourth underground operation, will start in 2018, ramping up to full production in 2020. The capital cost is estimated at $137.5 million.