London, England — MININGREVIEW.COM — 10 November 2010 – West African-focused gold mining and exploration company Randgold Resources Limited says surging prices for the precious metal more than doubled its third-quarter profit, and adds that it is targeting a 50% increase in output next year.
Announcing this in a release issued here, the company said it expected its fourth quarter production to be lifted by a better performance from its Loulo project in Mali, and from the start of production this week at its new Tongon mine in Ivory Coast.
“We are confident that this momentum will be maintained and, with a big improvement in gold production in the fourth quarter, our sights are still firmly set on a 50% increase in our gold output next year,” said chief executive Mark Bristow.
“Randgold has reported a decent set of Q3 results that crucially seem to reflect that it has overcome operational difficulties at its key Loulo producing mine,” said Liberum Capital in a note, adding that the one negative was the increase in cash costs.
Bristow told Reuters that he expected the group to produce about 450 000oz in 2010, in line with August’s revised target, implying fourth-quarter output of around 120 000oz. He anticipated cash costs falling towards US$600/oz in the fourth quarter, and into the lower US$500s in 2011 on higher gold grades.
Reuters reports that Randgold was not alone in cutting output forecasts for the year. Lower guidance from Petropavlovsk, African Barrick Gold and Centamin Egypt meant that the top four biggest pure gold producers listed in London reduced their 2010 targets.
“Randgold has not been immune to production difficulties in 2011, however theirs have not been as acute as their nearest peers African Barrick and Petropavlovsk,” said Liberum.
Gold prices that have risen 29% this year and reached a new record high of US$1 414.60 an ounce will give the producers some comfort.
“We are in the biggest bull market we have ever seen in the gold industry,” Bristow said. He expected gold prices to reach US$1 500 an ounce in 2011.