8th May 2014 08:39
LONDON (Alliance News) - Randgold Resources PLC said Thursday pretax profit for the first quarter was down on the previous quarter as the firm reports higher production figures, boosted by increased production from its Kibali mine.
Pretax profit for the three months to March 31, 2014 was USD108.1 million, down from USD129.7 million the previous quarter, but up from USD85.4 million on the comparative period in 2013.
Revenue for the quarter came in lower than the previous quarter at USD284.4 million, down from the USD291.8 million recorded for the quarter to December-end, and in line with the comparative 2013 quarter at USD284.7 million.
Randgold said it saw 2014 begin strongly, producing 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 rose during the period, reaching USD363 million, which Randgold said follows 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. The total cash cost per ounce of USD685 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, said the company.
Profit from mining decreased by 4% quarter-on-quarter to USD171 million, said Randgold, due to the increase in costs, but was up 14% on the corresponding quarter in 2013.
The firm also maintained its dividend at USD0.50 per share, flat on the previous year and 80% higher than its maiden dividend in 2007.
Looking ahead, the company said its strong start will support the firm as it focuses on reaching the million-ounce production mark for the year. CEO Mark Bristow said overall Randgold 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 USD1,000 [per ounce] 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," said the Chief Executive.
"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," added Bristow.
In order to improve the chances of such a discovery, Randgold said the turnover of targets is being accelerated, with 45 marginal targets having been rejected to reduce the current 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.
Randgold Resources was trading 0.40% lower at 4,684 pence per share Thursday morning, one of the biggest fallers on the FTSE 100.
By Alice Attwood; [email protected]; @AliceAtAlliance
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