HomeGoldRandgold boosts profit by 41%

Randgold boosts profit by 41%

The open pit at
Randgold’s Yalea mine
London, England — MININGREVIEW.COM — 07 May 2009 – International gold mining and exploration company Randgold Resources boosted its quarter-on- quarter net profit by 41% to US$13.1 million (R117.9 million) in the three months to March 2009, on the back of increased production and a higher gold price.

Releasing the company’s first-quarter results here, chief executive Mark Bristow said that while the company had more than met its financial and operational targets for the quarter, its real achievement was the substantial progress made on a range of expansion, development and exploration projects designed to ensure sustainable production and profitable growth.

The results statement revealed that attributable production for the quarter was up 3% at 110 313 ounces and gold sales had risen by 12% to US$87.3 million (R785.7 million). Total cash costs per ounce of US$461 were in line with the previous quarter.

It went on to say that Loulo had increased production by 17% to 70 826 ounces, thanks to higher ore grades and a slightly higher throughput, achieved in spite of a planned nine day shutdown required for the plant expansion project, which will raise production by some 30% to 300 000 tonnes per month. The increased production had been reflected in a 4% reduction in total cash costs per ounce. Production at Morila was down 16% at 98 718 ounces, in line with plan, as the operation was being converted from mining to stockpile treatment.

The Yalea underground mine development – which along with the plant expansion was anticipated to increase Loulo’s total production to 400 000 ounces per year by 2010 – had made a record advance of 605 metres in March, keeping the project on track to achieve its goal of ramping up to 120 000 tonnes of ore per month by the end of this year. Planning of Gara – the second underground mine at Loulo – was being finalised, with development scheduled to start in January 2010.

Turning to Côte d’Ivoire, the statement confirmed that the development of Randgold Resources’ new Tongon mine – which was scheduled to pour its first gold in the fourth quarter of 2010 – was gaining momentum. Work on the infrastructure had made significant progress, and the main contractor’s personnel, as well as the Randgold Resources management teams, were currently mobilising to the site.

During the past quarter, the company had completed the scoping study on Massawa, which had confirmed that this was a very robust project with a first inferred resource of 3.39 million ounces, capable of returns in excess of 20% at a gold price down to US$650 per ounce. Drilling for a prefeasibility study – due for completion by the end of this year – had been given the green light by the board.

The statement added that Gounkoto on the Loulo permit was also shaping up as a significant new discovery, with recent drill intersections returning 60 metres at 16.53g/t and 10.9 metres at 43.52g/t, adding to the 46.6 metres at 13.63g/t announced previously – some of the highest recorded in the company’s history. “This is a very exciting discovery – I have always said the Loulo region has legs, and this certainly highlights its continuing prospectivity,” Bristow concluded.