In its annual report for 2016 Randgold Resources confirmed its intention to increase its final dividend for the year ended 31 December 2016. Since its first dividend in respect of the 2006 financial year, the annual dividends have increased by 900% over that 10 year period.
The board has proposed a 52% year-on-year increase in the dividend to US$1.00 per share for the year ended 31 December 2016 for approval at its annual general meeting on 2 May 2017. The dividend will be paid in cash with no scrip alternative being made available.
[quote]“Now that we have reached our $500 million cash target, going forward Randgold intends to continue to pay an annual dividend that will take into account its profitability, cash flows and the wider capital requirements of the group in the context of its financial position, including its expected cross-cycle operating cash flows and its cross-cycle capital expenditure requirements,” states Randgold Resources CFO, Graham Shuttleworth.
“The company will seek to maintain a net cash position of approximately $500 million to provide financing flexibility should a new mine development or other growth opportunity be identified. To the extent that Randgold Resources has surplus capital, the company intends to return such excess to shareholders. The increase in dividends validates the business model and reflects the profitability and financial strength of the group,” he continues.
Randgold Resources CEO Mark Bristow, notes in the annual report that after a slow start to the year, it increased production to a new high of 1.25 Moz to achieve its annual guidance. All the operations contributed to this effort, with its flagship Loulo-Gounkoto complex in Mali posting particularly good results.
“We achieved, and exceeded our net cash target of $500 million and remained debt-free. We drove down our total cash cost per ounce of production and our profit rose by 38%. We completed or advanced our capital projects,” highlights Bristow.
“We reduced our lost time injury frequency rate to its lowest level ever. We continued to replenish our attributable group reserves and made significant progress towards our goal of identifying three new potential projects that fit our investment criteria in the next five years,” he continues.
Bristow says the immediate future is already taking shape with Kibali in the Democratic Republic of Congo on track for completion of the underground shaft facility this year, the development of a super pit at the Gounkoto mine in Mali going ahead, and the Massawa project in Senegal looking increasingly viable as the next Randgold mine.
Randgold Resources’ 10-year business plan, shared with the market last year, shows a business which will remain profitable at a long term gold price of $1 000/oz while producing at an average annual rate of approximately 1.2 Moz and generating cash that will support continued investment in the future as well as dividends.
“It is worth noting that with our big capital projects nearing completion and a cost profile trending down, Randgold Resources is a truly profitable business capable of delivering value to all stakeholders,” says Bristow.
Foremost among these stakeholders are the governments and people of Randgold Resources’ host countries.
“It is their support and cooperation that makes it possible for us to build and operate mines in some of the remotest parts of the world. We have proved over the years that we are there not to exploit these countries but to unlock the value of their mineral resources so that all may benefit,” states Bristow.
Also in the annual report, chairman of Randgold Resources, Christopher Coleman, says the company continues to place a strong emphasis on the entrenchment of its social licence, which it regards as an essential requirement for business success in Africa.
Its extensive social responsibility initiatives include Nos Vies en Partage, the independent charitable foundation Randgold Resources established to support quality of life improvement programmes in Africa, particularly those which support women and children.
“In his latest fundraising motorcycle safari through Africa last year, Mark Bristow and his team raised a further $2.5 million for the foundation,” states Coleman.
Feature image credit: Randgold Resources