Randgold Resources reports record profits

Feb 04 2013 09:46
I-Net Bridge

Johannesburg - International gold miner Randgold Resources achieved record production and profit levels in 2012‚ it said on Monday

The record came against the backdrop of a range of challenges associated with the expansion of its flagship Loulo-Gounkoto complex in Mali‚ the fast-track development of the giant Kibali project in the Democratic Republic of Congo‚ operational problems at the Tongon mine in Côte d’Ivoire and the general turmoil in Mali.

Profit for the year ended December 2012 was up 16% at $511m and production up 14% at 794‚844 ounces of gold.

Quarter on quarter‚ profit increased by 18% and production by 5%.

Cash and gold on hand at the year end amounted to $403m despite capital expenditure of $563m‚ mainly on the Kibali project.

The board has proposed a 25% increase in the annual dividend to 50 US cents for shareholder approval at the annual general meeting.

The company said that Loulo exceeded its production target for the year‚ delivering 503‚224 ounces on the back of the accelerated development of its Yalea and Gara underground mines and a ramp-up in plant throughput following the successful commissioning of a third mill.

The Morila joint venture also beat its forecast with annual production of 202‚513 ounces. A pit pushback project has been approved‚ subject to certain conditions‚ with mining due to start in Q2 this year. This is expected to extend the life of the operation.

Tongon’s production slipped from 250‚390 ounces in 2011 to 210‚615 ounces‚ mainly as a result of frequent outages in the grid power supply‚ which caused disruptive plant stoppages and process upsets as well as lower than planned recoveries. This situation was exacerbated by a fire in the milling circuits.

The plant was restored to full production by the end of January and the power and recovery problems are being addressed.

Kibali’s two ball mills were installed on their foundations ahead of schedule in January this year and open pit mining has produced the first ore for the feed stockpiles. Development has started on both underground declines and the parallel development of the vertical shaft is also underway.

The resettlement programme has been accelerated and all the villages in the critical area of the mine site have now been moved. With the construction‚ mining and social programmes all progressing well‚ the project remains on track to deliver first gold in the fourth quarter of this year‚ the group said.

In the meantime‚ Randgold has expanded its footprint in the DRC through a joint venture with Kilo Goldmines which gives it access to a further 2‚000km² of prospective greenstone belt in the Congo Craton.

“It’s been a particularly eventful year but the team once again rose to the challenges. Not only did we achieve very creditable results for 2012 but we start 2013 in good shape and with a renewed focus on growing our production and managing our costs‚” said chief executive Mark Bristow.

“Our chief objectives for this year are to pour first gold on schedule at Kibali‚ get Tongon back on target‚ maintain the strong performance at Loulo-Gounkoto and Morila‚ and continue to deliver profitable growth. Beyond that‚ our sights are still set on reaching our annual production target of plus 1.2 million ounces of gold by 2015.”

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