London, 8 May 2014 - A robust first quarter performance got Randgold Resources off to a strong start as it set out to crack the million-ounce production mark for the year.
Results for the three months to 31 March, published today, show the company produced a record 283 763 ounces, boosted by an increased contribution from Kibali. Kibali began commercial production in October last year and started commissioning its second sulphide mill circuit during the past quarter. The mine was officially opened by Democratic Republic of Congo’s Minister of Mines Martin Kabwelulu last week.
Gold sales of $363 million were up quarter on quarter, following a 3% increase in the average gold price received, and on the corresponding prior year quarter despite a 21% drop in the average gold price received. Total cash cost per ounce of $685 was up 9% quarter on quarter but down 19% on the corresponding prior year quarter on the back of the ramp-up of production at Kibali and significantly higher grades and recovery at the Loulo-Gounkoto complex in Mali. Profit from mining decreased by 4% quarter on quarter to $171 million, due to the increase in costs, but was up 14% on the corresponding quarter in 2013.
Operationally Loulo’s underground mines sustained their increasing delivery with another record output by both Yalea and Gara. Production and development at Kibali were on target. Tongon in Côte d’Ivoire again struggled with a below par throughput rate as the Vibrocone crushers, intended to address this issue, continued to experience mechanical failures.
Chief executive Mark Bristow said overall Randgold’s operations and development projects had both performed well and the company’s total cash cost and production guidance for the year remained intact.
“We have looked closely at our mines to ensure that they will still be profitable at $1 000/oz and we’ll continue to review all operations against a range of gold price scenarios. We have a solid 2014 budget in place and we have effectively banked our five-year plan. Our focus is now on rolling this out over a 10-year period,” he said.
“Kibali’s reserve base will take it beyond the 10 years at around 600 000 ounces per year. At the Loulo-Gounkoto complex, the potential for resource conversion at Yalea and Gara and the high grade underground project at Gounkoto should also enable it to deliver 600 000 ounces and more per year over 10 years, however, there is still work to do to optimise production in the last 4 years of the 10 year plan. Together with the Tongon Life of Mine extension plan, these potential reserve extensions should give us time to deliver a new world class discovery from our portfolio of quality greenfields prospects.”
Bristow said to improve the chances of such a discovery the turnover of targets was being accelerated, with 45 marginal targets having been rejected to reduce the total to 115. Key hunting grounds for a new discovery were Côte d’Ivoire, the Loulo district and neighbouring Senegal, and the northeast DRC which hosts Kibali as well as Randgold’s Kilogold joint venture.