London, 3 May 2012 - Randgold Resources has posted a robust performance for the first quarter of 2012 despite the challenges presented by a coup in Mali, the expansion of its Loulo complex and the stabilising of its new Tongon mine in Côte d’Ivoire.
Profit of US$104 million was up 126% on the corresponding quarter in 2011 while production of 165 443 ounces increased by 19% year on year. However, in line with guidance, both figures were down by 28% and 13% respectively on the previous quarter’s record results. Group operating costs of US$667/oz were in line with those of the previous year, and the cash on the balance sheet of US$457 million remained substantial despite significant capital expenditure during the quarter.
Flagship operation Loulo, where a third mill was successfully commissioned, showed the benefit of its plant expansion programme in improved throughput and recoveries. Throughput was ramped up steadily to 330 000 tonnes per month, in line with plan, and a phased expansion to 450 000 tonnes per month is being considered. Gounkoto, which operationally is part of the same complex, has been established as a separate corporate entity in terms of a new convention granted by the state of Mali during the quarter. The one-year-old Gounkoto has now recouped its capital.
Tongon had to contend with moving through transitional ore, stabilising the link to the Ivorian national power grid and dealing with industrial relations issues, but was trending positively at the end of the quarter. The Morila joint venture again produced a solid set of results.
In the Democratic Republic of Congo, construction started on schedule at the Kibali project which, when completed, will be one of the largest gold mines in Africa. Randgold owns 45% of the project, which it is developing. Randgold will also operate the mine which is scheduled to produce its first gold at the end of next year.
The company recently reported attributable reserves of 16.28 million ounces of gold compared to 16.39 million a year ago, despite a 58% increase in production last year. The overall reserve grade increased from 3.78g/t to 3.84g/t in line with Randgold’s emphasis on quality over quantity.
Chief executive Mark Bristow says despite the company’s full operational and developmental load, it is still maintaining its aggressive exploration programmes.
“There is a significant potential for finding additional ounces at the Loulo-Gounkoto complex, Tongon and Kibali, as well as for converting their substantial resources to reserves. In addition, our greenfields teams are evaluating the promising Boundiali and Dioala permits in Côte d’Ivoire and developing a new footprint around the Kampti permit in Burkina Faso. They are also looking beyond the known deposits on the enormous Kibali lease area as well as further afield in the DRC,” he said.