Quarterly Report 31 December 2016

6 February 2017

Overview

London, 6 February 2017  –  Randgold Resources increased production for the sixth successive year in 2016 while reducing total cash cost per ounce.  With profit of $294.2 million up 38% on the previous year, the board has proposed a 52% increase in the dividend to $1.00 per share.

Flagship Loulo-Gounkoto in Mali set a blistering pace to exceed its annual guidance by 37 000 ounces at its lowest ever total cash cost per ounce, and solid performances from the other mines contributed to the record group production of 1 252 957 ounces (2015: 1 211 288 ounces).  The group’s total cash cost per ounce of $639 was down 6% on the previous year.

In spite of the high level of activity at its operations, Randgold broke another record by reducing its lost time injury frequency rate by 22% to a lowest ever 0.46.

Chief executive Mark Bristow said in a year of significant achievements, it was also notable that Randgold had passed its net cash target of $500 million, with $516.3 million in the bank at the end of 2016, and no debt. 

Turning to the operations, he said Tongon in Côte d’Ivoire had achieved its revised production guidance and reduced its total cash cost per ounce while Kibali in the Democratic Republic of Congo came back strongly after a slow first half and upped quarter-on-quarter production by 21% in Q4.  The shaft development of Kibali is scheduled for completion by the end of this year with the integration of its underground mine’s decline and vertical shaft systems.  Kibali’s second hydropower station has just started commissioning while the third station is currently being built by an all-Congolese contracting team.

Randgold’s first mine, Morila in Mali, is now a tailings retreatment operation but continues to make a contribution towards its rehabilitation costs.  As it heads for closure in 2019, Morila has advanced its plans for an agribusiness centre    which will encompass the wide range of agribusiness projects it initiated over the years    to the point where this qualifies for government support as an agripole.  The development of this project is in line with Randgold’s policy that its host communities should benefit from its activities, even after mine closures.

“We have shared with the market our 10-year plan, which shows how we plan to sustain our profitability over the next decade at a gold price of $1 000 per ounce.  It also envisages    but does not depend on    the development of three new mines over the next five years,” Bristow said.

“The board has now given the go-ahead for the Gounkoto super pit and the technical and financial study on the Massawa-Sofia project in Senegal has demonstrated that this has the potential to meet our investment criteria.  In the meantime, our exploration programmes have continued to add reserves at Loulo-Gounkoto and Sofia and to expand our portfolio in Côte d’Ivoire.  As reported earlier, we have also increased our presence in our target areas through a number of early-stage joint ventures.”

Quarterly Report 31 December 2016

6 February 2017

Key Performance Indicators
  • Record gold production increases for sixth consecutive year, up 26% quarter on quarter and 3% year on year
  • Net cash target of +$500 million reached, with no debt
  • Profit up 22% quarter on quarter and 38% year on year
  • Total cash cost per ounce down 17% quarter on quarter and 6% year on year
  • Record low lost time injury frequency rate of 0.46 down 22% year on year
  • All mines ISO 14001 certified and apart from Kibali, OHSAS 18001 certified; Kibali ISO 45001 certification imminent
  • Loulo-Gounkoto complex beats annual guidance by 37 000oz at lowest recorded total cash cost per ounce
  • Tongon achieves revised guidance of 260 000oz with total cash cost per ounce down 15% quarter on quarter and 8% year on year
  • Continued operational improvement at Kibali with production up 21% quarter on quarter after the slow first half of the year
  • Morila seeks government approval for post mining agripole project
  • Gounkoto super pit gets board approval
  • Updated Massawa-Sofia technical and financial study demonstrates potential to meet Randgold’s investment criteria
  • Exploration drives reserve additions at Loulo-Gounkoto and Sofia, and expands portfolio in Côte d’Ivoire
  • Proposed dividend up 52%

Randgold Resources Limited (‘Randgold’) had 93.8 million shares in issue as at 31 December 2016.

Quarterly Report 31 December 2016

6 February 2017

Summarised Financial Information

Quarterly Report 31 December 2016

6 February 2017

Comments

Gold sales for the quarter of $453.1 million increased by 15% from $392.8 million in the previous quarter.  Group gold production for the quarter of 378 388oz was up 26% from the previous quarter due to increases in gold production across all of the operations, while the average gold price received of $1 206/oz dropped by 10% quarter on quarter (2016 Q3: $1 333/oz).  Gold sales increased by 28% from the corresponding quarter of 2015, reflecting the higher ounces sold in the quarter, as well as the higher average gold price received.

Total cash costs for the quarter of $206.3 million were up 6% from the previous quarter and in line with the corresponding quarter of 2015, reflecting the increased throughput and production, including increased royalties. 

Total cash cost per ounce of $549/oz decreased by 17% quarter on quarter and by 13% compared to the corresponding quarter in 2015, reflecting the higher production during the quarter, on the back of the increased throughput, higher grades and better recovery across the board, but especially at the Loulo-Gounkoto complex.

Profit from mining was significantly up (25%) to $246.8 million from the previous quarter, and 65% up on the corresponding quarter of 2015, largely as a result of increased sales and production, partially offset by the drop in the average gold price received.

Exploration and corporate expenditure of $8.0 million decreased by 29% quarter on quarter, and by 41% compared to the corresponding quarter in 2015, principally due to reductions in general and exploration expenditure.

Depreciation and amortisation of $61.4 million increased by 53% from the previous quarter and by 89% from the corresponding quarter of 2015.  Depreciation at Gounkoto increased from $1.8 million in Q3 2016 to $17.7 million in Q4 2016, due to the inclusion of depreciation of the stripping asset ($15.5 million) created in the previous quarter as the ore was mined and fed during Q4.  Depreciation at Loulo increased from $26.4 million in Q3 to $29.1 million in Q4, in line with the increased throughput as well as additional underground assets brought into use during the quarter.  Depreciation at Tongon also increased from $11.7 million in Q3 to $14.2 million in Q4 due to an 11% increase in throughput quarter on quarter, as well as assets related to the crusher and power upgrade that were brought into use during Q4.

Other income in the quarter of $1.2 million, relating to management fees from Kibali and Morila, was in line with the previous quarter and was down from $3.4 million in the corresponding quarter of the prior year.  The decrease from the corresponding quarter in 2015 is the result of a net operational foreign exchange gain of $2.0 million that was included in other income during that quarter.  These gains and losses arise from the settlement of invoices in currencies other than the US dollar, as well as the translation of balances denominated in currencies such as the CFA, euro and South African rand to the US dollar rate and reflects the movements in these currencies during the respective quarter. 

Share of losses from equity accounted joint ventures was $3.2 million compared to profits from joint ventures of $6.0 million in the previous quarter and to $1.9 million profit in Q4 2015.  Kibali’s share of equity accounted joint venture profits decreased from $9.2 million in Q3 2016 to $0.9 million in the current quarter.  Profit from mining for Kibali for Q4 2016 amounted to $41.2 million compared to a profit of $39.3 million in Q3 2016, reflecting the increased production partially offset by the lower average gold price received.  The share of profits from the Kibali joint ventures are stated after depreciation of $31.4 million (30 Sep 2016: $26.6 million), foreign exchange losses of $11.8 million (30 Sep 2016: $4.8 million) and a deferred tax credit of $4.2 million (30 Sep 2016: $1.4 million).  The increase in depreciation was driven by an increase in throughput quarter on quarter, as well as additions of $28.1 million (attributable) to the underground mining infrastructure, hydropower plants and other assets during Q4.  The increase in foreign exchange losses is the result of a sharp depreciation in the Congolese Franc compared to the US dollar and the conversion of TVA (value added tax) balances owed to Kibali which are denominated in Congolese Franc.  The increase in the tax credit quarter on quarter was a result of a decrease in the deferred tax liability quarter on quarter in line with profits.  Morila’s share of equity accounted joint venture losses increased from a loss of $3.5 million in Q3 2016 to a loss of $4.0 million in Q4 2016, following the drop in the average gold price received, notwithstanding higher production during the quarter. 

Income tax expense of $33.5 million was in line with the charge in Q3 of 2016 and increased by 97% from the corresponding quarter in 2015, mainly due to increased profits at the Loulo complex as well the recognition of an income tax expense at Tongon as Tongon’s tax exoneration period expired in December 2015 and it is now liable for income tax at a rate of 25% of taxable profits.

Profit for the quarter was up 22% from the previous quarter and up 76% from the corresponding quarter of 2015, reflecting the increase in profit from mining, partially offset by the increased depreciation and other charges as explained above during the quarter.  Basic earnings per share increased by 20% to $0.84 quarter on quarter (Q3 2016: $0.70), reflecting the higher profits.  Compared to Q4 2015, basic earnings per share increased by 75%.

Net cash generated from operating activities for the quarter of $204.7 million increased by 72% from the previous quarter and by 79% from the corresponding quarter in 2015, primarily reflecting the increase in profits from operations.

Comments on the year ended 31 December 2016
Gold sales for the year ended 31 December 2016 of $1.55 billion were up 11% from the previous year principally as a result of the 8% increase in the average gold price received of $1 244/oz (2015: $1 152/oz), as well as a 3% increase in the number of ounces of gold sold across the group.  Total cash costs for the year ended 31 December 2016 of $794.4 million (2015: $822.7 million) dropped by 3% on the prior year, driven by lower unit costs, especially at the Loulo-Gounkoto complex.  Total cash cost per ounce dropped 6% to $639/oz for the year (2015: $679/oz), reflecting the 3% increase in ounces sold year on year, as well as the 3% decrease in total cash costs.

Profit for the year ended 31 December 2016 of $294.2 million represents an increase of 38% compared to a profit of $212.8 million in the previous year, reflecting increased revenue and lower cash costs as described above, partially offset by a 16% increase in depreciation and the 126% increase in corporate tax expenses for the year.
 
Depreciation and amortisation for the year ended 31 December 2016 of $175.3 million increased from the prior year cost of $150.9 million.  Depreciation at Loulo increased from $98.5 million in 2015 to $105.2 million in 2016, mainly driven by Yalea and Gara underground equipment being brought into use during 2016 and the higher throughput achieved.  Depreciation at Gounkoto increased from $6.7 million in 2015 to $23.5 million in 2016, in line with the increased throughput, as well as depreciation of the stripping asset ($15.5 million) created in Q3 of 2016.  Depreciation at Tongon of $45.7 million in 2016 was in line with the depreciation charged in 2015 ($44.4 million).

Exploration and corporate expenditure of $41.2 million for the year ended 31 December 2016 decreased by 9% from the previous year’s $45.1 million, reflecting reductions in general and corporate expenditure, partially offset by increased exploration activity during the year.

Other income of $6.0 million and $15.6 million for the years ended 31 December 2016 and 2015 respectively, include management fees from Morila and Kibali (2016: $5.0 million compared to 2015: $6.1 million), as well as operational foreign exchange gains (2016: $1.0 million compared to 2015: $9.6 million).  Other expenses for the year of $6.0 million was in line with the prior year’s $5.7 million and includes operational foreign exchange losses as mentioned earlier.

Share of profits of equity accounted joint ventures of $17.3 million dropped by 78% year on year.

Kibali’s share of equity accounted joint venture profits decreased from $70.3 million in 2015 to $24.2 million in 2016.  Profit from mining for Kibali for 2016 amounted to $131.0 million compared to a profit of $161.2 million in 2015, reflecting the decreased production and increased costs, partially offset by the higher average gold price received.  The share of profits from the Kibali joint venture is stated after depreciation of $102.7 million (2015: $87.3 million), foreign exchange losses of $16.3 million (2015: foreign exchange gain of $0.2 million) and a deferred tax credit of $10.3 million (2015: deferred tax charge of $8.0 million). 

The increase in depreciation at Kibali was driven by an increase in throughput year on year, as well as additions to the underground mining infrastructure, hydropower plants and other assets ($84.9 million attributable).  The increase in foreign exchange losses is the result of a sharp depreciation in the Congolese Franc compared to the US dollar during the second half of the year and the conversion of TVA balances owed to Kibali which are denominated in Congolese Franc.  The increase in the tax credit was a result of a decrease in the deferred tax liability during the year.

Morila’s share of equity accounted joint venture profits decreased from a profit of $7.0 million in 2015 to a loss of $7.1 million in 2016. Profit from mining for 2016 was $2.7 million.  The net loss of $7.1 million includes $2.5 million of rehabilitation costs (de-capping of the TSF), $2.1 million of costs relating to obsolete stock write-downs and the agribusiness feasibility projects, $3.8 million of depreciation charges and $0.6 million of tax charges.  Profits decreased year on year following the drop in production year on year due to feeding predominantly lower grade tailings storage facility (TSF) material.

Income tax expense of $108.4 million increased by 126% year on year, reflecting higher accruals for tax charges at the Loulo-Gounkoto complex, in line with profits, as well as higher tax charges at Tongon, following the end of Tongon’s tax exoneration period in December 2015. 

Basic earnings per share increased by 30% to $2.64 (2015: $2.03), in line with the increase in profit for the year as described above.

Net cash generated from operating activities for the year of $521.2 million increased by 31% from the previous year, in line with the strong operating performances at Loulo-Gounkoto and at Tongon.  Cash and cash equivalents increased to $516.3 million compared to $213.4 million at the end of 2015, reflecting the net cash generated from operations, partially offset by increased additions to property, plant and equipment, as well as increased dividends paid to shareholders.

The board has proposed a final cash dividend of 100 US cents per share, a 52% increase on the prior year’s 66 US cents per share.  The proposed final cash dividend will be put to shareholders for approval at the annual general meeting to be held on 2 May 2017.  The dividend will be paid in cash with no script alternative being made available.  The company anticipates, subject to shareholder approval, paying the final cash dividend on 26 May 2017.  The ex-dividend date is 16 March 2017 and the record date for the dividend is 17 March 2017.  Further details of the company’s proposed final cash dividend will be made available to shareholders in the explanatory notes of the company’s notice of annual general meeting.

Overview

Quarterly Report 31 December 2016

6 February 2017

Overview

London, 6 February 2017  –  Randgold Resources increased production for the sixth successive year in 2016 while reducing total cash cost per ounce.  With profit of $294.2 million up 38% on the previous year, the board has proposed a 52% increase in the dividend to $1.00 per share.

Flagship Loulo-Gounkoto in Mali set a blistering pace to exceed its annual guidance by 37 000 ounces at its lowest ever total cash cost per ounce, and solid performances from the other mines contributed to the record group production of 1 252 957 ounces (2015: 1 211 288 ounces).  The group’s total cash cost per ounce of $639 was down 6% on the previous year.

In spite of the high level of activity at its operations, Randgold broke another record by reducing its lost time injury frequency rate by 22% to a lowest ever 0.46.

Chief executive Mark Bristow said in a year of significant achievements, it was also notable that Randgold had passed its net cash target of $500 million, with $516.3 million in the bank at the end of 2016, and no debt. 

Turning to the operations, he said Tongon in Côte d’Ivoire had achieved its revised production guidance and reduced its total cash cost per ounce while Kibali in the Democratic Republic of Congo came back strongly after a slow first half and upped quarter-on-quarter production by 21% in Q4.  The shaft development of Kibali is scheduled for completion by the end of this year with the integration of its underground mine’s decline and vertical shaft systems.  Kibali’s second hydropower station has just started commissioning while the third station is currently being built by an all-Congolese contracting team.

Randgold’s first mine, Morila in Mali, is now a tailings retreatment operation but continues to make a contribution towards its rehabilitation costs.  As it heads for closure in 2019, Morila has advanced its plans for an agribusiness centre    which will encompass the wide range of agribusiness projects it initiated over the years    to the point where this qualifies for government support as an agripole.  The development of this project is in line with Randgold’s policy that its host communities should benefit from its activities, even after mine closures.

“We have shared with the market our 10-year plan, which shows how we plan to sustain our profitability over the next decade at a gold price of $1 000 per ounce.  It also envisages    but does not depend on    the development of three new mines over the next five years,” Bristow said.

“The board has now given the go-ahead for the Gounkoto super pit and the technical and financial study on the Massawa-Sofia project in Senegal has demonstrated that this has the potential to meet our investment criteria.  In the meantime, our exploration programmes have continued to add reserves at Loulo-Gounkoto and Sofia and to expand our portfolio in Côte d’Ivoire.  As reported earlier, we have also increased our presence in our target areas through a number of early-stage joint ventures.”

Key Performance Indicators

Quarterly Report 31 December 2016

6 February 2017

Key Performance Indicators
  • Record gold production increases for sixth consecutive year, up 26% quarter on quarter and 3% year on year
  • Net cash target of +$500 million reached, with no debt
  • Profit up 22% quarter on quarter and 38% year on year
  • Total cash cost per ounce down 17% quarter on quarter and 6% year on year
  • Record low lost time injury frequency rate of 0.46 down 22% year on year
  • All mines ISO 14001 certified and apart from Kibali, OHSAS 18001 certified; Kibali ISO 45001 certification imminent
  • Loulo-Gounkoto complex beats annual guidance by 37 000oz at lowest recorded total cash cost per ounce
  • Tongon achieves revised guidance of 260 000oz with total cash cost per ounce down 15% quarter on quarter and 8% year on year
  • Continued operational improvement at Kibali with production up 21% quarter on quarter after the slow first half of the year
  • Morila seeks government approval for post mining agripole project
  • Gounkoto super pit gets board approval
  • Updated Massawa-Sofia technical and financial study demonstrates potential to meet Randgold’s investment criteria
  • Exploration drives reserve additions at Loulo-Gounkoto and Sofia, and expands portfolio in Côte d’Ivoire
  • Proposed dividend up 52%

Randgold Resources Limited (‘Randgold’) had 93.8 million shares in issue as at 31 December 2016.

Downloads

Summarised financial information

Quarterly Report 31 December 2016

6 February 2017

Summarised Financial Information

Comments

Quarterly Report 31 December 2016

6 February 2017

Comments

Gold sales for the quarter of $453.1 million increased by 15% from $392.8 million in the previous quarter.  Group gold production for the quarter of 378 388oz was up 26% from the previous quarter due to increases in gold production across all of the operations, while the average gold price received of $1 206/oz dropped by 10% quarter on quarter (2016 Q3: $1 333/oz).  Gold sales increased by 28% from the corresponding quarter of 2015, reflecting the higher ounces sold in the quarter, as well as the higher average gold price received.

Total cash costs for the quarter of $206.3 million were up 6% from the previous quarter and in line with the corresponding quarter of 2015, reflecting the increased throughput and production, including increased royalties. 

Total cash cost per ounce of $549/oz decreased by 17% quarter on quarter and by 13% compared to the corresponding quarter in 2015, reflecting the higher production during the quarter, on the back of the increased throughput, higher grades and better recovery across the board, but especially at the Loulo-Gounkoto complex.

Profit from mining was significantly up (25%) to $246.8 million from the previous quarter, and 65% up on the corresponding quarter of 2015, largely as a result of increased sales and production, partially offset by the drop in the average gold price received.

Exploration and corporate expenditure of $8.0 million decreased by 29% quarter on quarter, and by 41% compared to the corresponding quarter in 2015, principally due to reductions in general and exploration expenditure.

Depreciation and amortisation of $61.4 million increased by 53% from the previous quarter and by 89% from the corresponding quarter of 2015.  Depreciation at Gounkoto increased from $1.8 million in Q3 2016 to $17.7 million in Q4 2016, due to the inclusion of depreciation of the stripping asset ($15.5 million) created in the previous quarter as the ore was mined and fed during Q4.  Depreciation at Loulo increased from $26.4 million in Q3 to $29.1 million in Q4, in line with the increased throughput as well as additional underground assets brought into use during the quarter.  Depreciation at Tongon also increased from $11.7 million in Q3 to $14.2 million in Q4 due to an 11% increase in throughput quarter on quarter, as well as assets related to the crusher and power upgrade that were brought into use during Q4.

Other income in the quarter of $1.2 million, relating to management fees from Kibali and Morila, was in line with the previous quarter and was down from $3.4 million in the corresponding quarter of the prior year.  The decrease from the corresponding quarter in 2015 is the result of a net operational foreign exchange gain of $2.0 million that was included in other income during that quarter.  These gains and losses arise from the settlement of invoices in currencies other than the US dollar, as well as the translation of balances denominated in currencies such as the CFA, euro and South African rand to the US dollar rate and reflects the movements in these currencies during the respective quarter. 

Share of losses from equity accounted joint ventures was $3.2 million compared to profits from joint ventures of $6.0 million in the previous quarter and to $1.9 million profit in Q4 2015.  Kibali’s share of equity accounted joint venture profits decreased from $9.2 million in Q3 2016 to $0.9 million in the current quarter.  Profit from mining for Kibali for Q4 2016 amounted to $41.2 million compared to a profit of $39.3 million in Q3 2016, reflecting the increased production partially offset by the lower average gold price received.  The share of profits from the Kibali joint ventures are stated after depreciation of $31.4 million (30 Sep 2016: $26.6 million), foreign exchange losses of $11.8 million (30 Sep 2016: $4.8 million) and a deferred tax credit of $4.2 million (30 Sep 2016: $1.4 million).  The increase in depreciation was driven by an increase in throughput quarter on quarter, as well as additions of $28.1 million (attributable) to the underground mining infrastructure, hydropower plants and other assets during Q4.  The increase in foreign exchange losses is the result of a sharp depreciation in the Congolese Franc compared to the US dollar and the conversion of TVA (value added tax) balances owed to Kibali which are denominated in Congolese Franc.  The increase in the tax credit quarter on quarter was a result of a decrease in the deferred tax liability quarter on quarter in line with profits.  Morila’s share of equity accounted joint venture losses increased from a loss of $3.5 million in Q3 2016 to a loss of $4.0 million in Q4 2016, following the drop in the average gold price received, notwithstanding higher production during the quarter. 

Income tax expense of $33.5 million was in line with the charge in Q3 of 2016 and increased by 97% from the corresponding quarter in 2015, mainly due to increased profits at the Loulo complex as well the recognition of an income tax expense at Tongon as Tongon’s tax exoneration period expired in December 2015 and it is now liable for income tax at a rate of 25% of taxable profits.

Profit for the quarter was up 22% from the previous quarter and up 76% from the corresponding quarter of 2015, reflecting the increase in profit from mining, partially offset by the increased depreciation and other charges as explained above during the quarter.  Basic earnings per share increased by 20% to $0.84 quarter on quarter (Q3 2016: $0.70), reflecting the higher profits.  Compared to Q4 2015, basic earnings per share increased by 75%.

Net cash generated from operating activities for the quarter of $204.7 million increased by 72% from the previous quarter and by 79% from the corresponding quarter in 2015, primarily reflecting the increase in profits from operations.

Comments on the year ended 31 December 2016
Gold sales for the year ended 31 December 2016 of $1.55 billion were up 11% from the previous year principally as a result of the 8% increase in the average gold price received of $1 244/oz (2015: $1 152/oz), as well as a 3% increase in the number of ounces of gold sold across the group.  Total cash costs for the year ended 31 December 2016 of $794.4 million (2015: $822.7 million) dropped by 3% on the prior year, driven by lower unit costs, especially at the Loulo-Gounkoto complex.  Total cash cost per ounce dropped 6% to $639/oz for the year (2015: $679/oz), reflecting the 3% increase in ounces sold year on year, as well as the 3% decrease in total cash costs.

Profit for the year ended 31 December 2016 of $294.2 million represents an increase of 38% compared to a profit of $212.8 million in the previous year, reflecting increased revenue and lower cash costs as described above, partially offset by a 16% increase in depreciation and the 126% increase in corporate tax expenses for the year.
 
Depreciation and amortisation for the year ended 31 December 2016 of $175.3 million increased from the prior year cost of $150.9 million.  Depreciation at Loulo increased from $98.5 million in 2015 to $105.2 million in 2016, mainly driven by Yalea and Gara underground equipment being brought into use during 2016 and the higher throughput achieved.  Depreciation at Gounkoto increased from $6.7 million in 2015 to $23.5 million in 2016, in line with the increased throughput, as well as depreciation of the stripping asset ($15.5 million) created in Q3 of 2016.  Depreciation at Tongon of $45.7 million in 2016 was in line with the depreciation charged in 2015 ($44.4 million).

Exploration and corporate expenditure of $41.2 million for the year ended 31 December 2016 decreased by 9% from the previous year’s $45.1 million, reflecting reductions in general and corporate expenditure, partially offset by increased exploration activity during the year.

Other income of $6.0 million and $15.6 million for the years ended 31 December 2016 and 2015 respectively, include management fees from Morila and Kibali (2016: $5.0 million compared to 2015: $6.1 million), as well as operational foreign exchange gains (2016: $1.0 million compared to 2015: $9.6 million).  Other expenses for the year of $6.0 million was in line with the prior year’s $5.7 million and includes operational foreign exchange losses as mentioned earlier.

Share of profits of equity accounted joint ventures of $17.3 million dropped by 78% year on year.

Kibali’s share of equity accounted joint venture profits decreased from $70.3 million in 2015 to $24.2 million in 2016.  Profit from mining for Kibali for 2016 amounted to $131.0 million compared to a profit of $161.2 million in 2015, reflecting the decreased production and increased costs, partially offset by the higher average gold price received.  The share of profits from the Kibali joint venture is stated after depreciation of $102.7 million (2015: $87.3 million), foreign exchange losses of $16.3 million (2015: foreign exchange gain of $0.2 million) and a deferred tax credit of $10.3 million (2015: deferred tax charge of $8.0 million). 

The increase in depreciation at Kibali was driven by an increase in throughput year on year, as well as additions to the underground mining infrastructure, hydropower plants and other assets ($84.9 million attributable).  The increase in foreign exchange losses is the result of a sharp depreciation in the Congolese Franc compared to the US dollar during the second half of the year and the conversion of TVA balances owed to Kibali which are denominated in Congolese Franc.  The increase in the tax credit was a result of a decrease in the deferred tax liability during the year.

Morila’s share of equity accounted joint venture profits decreased from a profit of $7.0 million in 2015 to a loss of $7.1 million in 2016. Profit from mining for 2016 was $2.7 million.  The net loss of $7.1 million includes $2.5 million of rehabilitation costs (de-capping of the TSF), $2.1 million of costs relating to obsolete stock write-downs and the agribusiness feasibility projects, $3.8 million of depreciation charges and $0.6 million of tax charges.  Profits decreased year on year following the drop in production year on year due to feeding predominantly lower grade tailings storage facility (TSF) material.

Income tax expense of $108.4 million increased by 126% year on year, reflecting higher accruals for tax charges at the Loulo-Gounkoto complex, in line with profits, as well as higher tax charges at Tongon, following the end of Tongon’s tax exoneration period in December 2015. 

Basic earnings per share increased by 30% to $2.64 (2015: $2.03), in line with the increase in profit for the year as described above.

Net cash generated from operating activities for the year of $521.2 million increased by 31% from the previous year, in line with the strong operating performances at Loulo-Gounkoto and at Tongon.  Cash and cash equivalents increased to $516.3 million compared to $213.4 million at the end of 2015, reflecting the net cash generated from operations, partially offset by increased additions to property, plant and equipment, as well as increased dividends paid to shareholders.

The board has proposed a final cash dividend of 100 US cents per share, a 52% increase on the prior year’s 66 US cents per share.  The proposed final cash dividend will be put to shareholders for approval at the annual general meeting to be held on 2 May 2017.  The dividend will be paid in cash with no script alternative being made available.  The company anticipates, subject to shareholder approval, paying the final cash dividend on 26 May 2017.  The ex-dividend date is 16 March 2017 and the record date for the dividend is 17 March 2017.  Further details of the company’s proposed final cash dividend will be made available to shareholders in the explanatory notes of the company’s notice of annual general meeting.

Quarterly Report 31 December 2016

6 February 2017

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