London, 5 November 2015 - Randgold Resources boosted production to a new record level in the third quarter of the year on the back of a steady all-round operational performance while stepping up exploration programmes designed to find its next world-class discovery as well as to expand its existing reserves.
Gold production for the quarter was 305 288 ounces, up more than 5 000 ounces on Q2, with Kibali and Morila doing exceptionally well. Heavy rains in Mali resulted in a pump system failure at Loulo, which temporarily cut off access to the high grade ore sections underground at Yalea. This resulted in lower than forecast grades and production, impacting on total cash cost per ounce, which rose to $699/oz (Q2: $684/oz). A further drop in the gold price also depressed profits, which were $48.8 million against the previous quarter's $59.2 million.
Chief executive Mark Bristow said considering that the gold price had declined by 6% over this period to its lowest point since the first quarter of 2010, Randgold's profit performance continued to be creditable. He noted that the company remained debt-free, with net cash increasing significantly from $109 million to $168 million, further strengthening its balance sheet.
During the quarter, Tongon paid back the last of its shareholders' loans of $448 million, and can now start paying dividends, Kibali repaid another tranche of its shareholders' loans and Gounkoto declared a dividend of $11 million, bringing its total for the year to date to $51.7 million. Kibali remains on track to exceed its full-year production guidance of 600 000 ounces and the group as a whole is expected to be within its guidance range.
Bristow said the group's intensified exploration drive was producing positive results across the board, and in the new field season its generative team would be chasing opportunities to expand its footprint in its West and Central African target areas.
'Key developments to date have been the good results from Sofia in Senegal, which have significantly enhanced the prospects of our Massawa project, the ongoing brownfields drilling at Gara and Yalea, the extension of resources and reserves around the Gounkoto and Tongon orebodies, and our improved understanding of the controls and styles of mineralisation across the Kibali permit, which I believe will deliver substantial additional resources,' he said.
'In the fourth quarter we'll be putting a big effort into our highly prospective holdings in Côte d'Ivoire, with a VTEM survey scheduled across the Boundiali and Makono permits in the north of the country. We'll also be progressing the due diligence study on our Obuasi opportunity.'
Bristow said despite the state of the gold market Randgold continued to invest in its structured sustainability programmes, designed in line with its philosophy that mining companies had a moral obligation to put part of the value of the orebodies they exploit back into the creation of sustainable economic activities for the local communities.
These initiatives included the development of an agribusiness training centre between Loulo and Gounkoto, officially inaugurated last week, the establishment of microfinance businesses at all Randgold's operations, completed feasibility studies on an agribusiness at Morila and a large-scale palm oil business at Kibali, and an entrepreneur training programme, also at Kibali.
'The gold mining industry is severely stressed and Randgold is certainly not immune to the pressure. Relative to our peers, however, we are still doing well. We have a proven strategy against which we constantly test our businesses, and we are relentless in our drive to deliver on our plans,' he said.