HomeGoldGood first quarter for Randgold

Good first quarter for Randgold

Randgold’s Morila
pit east pushback
in Mali
London, England — MININGREVIEW.COM —06 May 2008 – Despite intensifying industry-wide cost pressures – notably the sharp rise in the oil price – international gold mining and exploration company Randgold Resources has posted a net profit of US$18.2 million (R140 million) for the March quarter, up 25% on the previous quarter and 42% on the corresponding period in 2007.

Releasing its results here today for the quarter ended 31 March 2008, the company revealed that attributable production of 103 649 oz was down 13% on the previous quarter, while total cash cost of US$440/oz was up 12%, but both were in line with plan considering the oil price. Chief executive Mark Bristow said the company’s production and cost profile was expected to show improvement in the latter half of the year, when the new high grade Yalea underground mine at its Loulo complex in Mali came on stream.

“The Yalea orebody has been intersected, and the new mine has already delivered its first development ore to the Loulo plant,” the results statement noted, “and a second underground mine, Gara, is at final planning stage. Loulo’s two existing open-pit operations produced 63 249 oz at a total cash cost of US$470/oz during the quarter, and the mine is on track to meet its full-year target of 265 000 oz,” it continued. “The underground operations are scheduled to increase this annual output to 400 000 oz by 2010.”

Elsewhere in Mali, Randgold Resources took over operational responsibility for the Morila mine from its joint-venture partner AngloGold Ashanti during the quarter. Following the change, a multi-disciplinary review team from both sides identified a number of operational issues which require rectification. “Corrective action is being taken,” the statement said.

Morila produced 101 000 oz at a total cash cost of US$393/oz during the quarter, against the previous quarter’s 129 193 oz at US$334/oz.

In Côte d’Ivoire, site preparation is underway at Tongon, where the company’s third mine is scheduled for development. Infill drilling increased Tongon’s probable reserves by 52% to 2.44 Moz during the past quarter, and Bristow said continued drilling was likely to upgrade more resources to the reserve category.

The acquisition of a further 5% participation interest in Tongon has increased Randgold Resources’ stake in the project to 81%.

On the exploration front, three advanced targets – Massawa in Senegal, Tiasso in Côte d’Ivoire and Kiaka in Burkina Faso – are scheduled for drill-testing in the current quarter. The company’s exploration teams are active in six west and east African countries, constantly feeding new prospects into its pipeline.

“We’re also looking closely at a number of external growth opportunities, including joint ventures, which offer us the potential of creating real value through the application of our skills,” Bristow concluded.